WVC 11 - 13 R- 1
§11-13R-1. Short title.
This article may be cited as the "West Virginia Strategic
Research and Development Tax Credit Act".

WVC 11 - 13 R- 2
§11-13R-2. Legislative finding and purpose.
The Legislature finds that the encouragement of research and
development in this state is in the public interest and promotes
economic growth and development and the general welfare of the
people of this state. In order to encourage research and
development in this state and thereby increase employment and
economic development, there is hereby provided a strategic research
and development tax credit.

WVC 11 - 13 R- 3
§11-13R-3. Definitions.
(a) General. -- When used in this article or in the
administration of this article, terms defined in subsection (b) of
this section have the meanings ascribed to them by this section
unless a different meaning is clearly required by either the
context in which the term is used or by specific definition in this
article.

(b) Terms defined. --

(1) "Base amount" means:

(A) The average annual combined qualified research and
development expenditure for the three taxable years immediately
preceding the taxable year for which a credit is claimed under this
article;

(B) For a taxpayer that has filed a tax return under article
twenty-three of this chapter for fewer than three but at least one
prior taxable year, determined on the basis of all filings by the
taxpayer's controlled group, the base amount is the average annual
combined qualified research and development expenditure for the
number of immediately preceding taxable years, other than short
taxable years, during which the taxpayer has filed a tax return
under article twenty-three of this chapter; or

(C) For a taxpayer that has not filed a tax return under
article twenty-three of this chapter for at least one taxable year,
determined on the basis of all filings by the taxpayer's controlled
group, the base amount is zero.

(2) "Commissioner" and "Tax Commissioner" are used
interchangeably herein and mean the Tax Commissioner of the State
of West Virginia or his or her delegate.

(3) "Controlled group" means a controlled group as defined by
section 1563 of the Internal Revenue Code of 1986, as amended.

(4) "Corporation" means any corporation, limited liability
company, joint-stock company or association and any business
conducted by a trustee or trustees wherein interest or ownership is
evidenced by a certificate of interest or ownership or similar
written instrument.

(5) "Delegate" in the phrase "or his or her delegate," when
used in reference to the Tax Commissioner, means any officer or
employee of the State Tax Division of the Department of Tax and
Revenue duly authorized by the Tax Commissioner directly, or
indirectly by one or more redelegations of authority, to perform
the functions mentioned or described in this article.

(6) "Eligible taxpayer" means any person that is subject to
the tax imposed by article twenty-three or article twenty-four of
this chapter that is engaged in qualified research and development
that has paid or incurred investment in qualified research and
development credit property or that has paid or incurred qualified
research and development expenses as defined in section four of
this article. In the case of a sole proprietorship subject to
neither the tax imposed by article twenty-three nor the tax imposed
by article twenty-four, the term "eligible taxpayer" means any sole proprietor who is subject to the tax imposed by article twenty-one
of this chapter and who is engaged in qualified research and
development that has paid or incurred investment in qualified
research and development credit property or that has paid or
incurred qualified research and development expenses as defined in
section four of this article.

(7) "Partnership" includes a syndicate, group, pool, joint
venture or other unincorporated organization through or by means of
which any business, financial operation or venture is carried on,
and which is not a trust or estate, a corporation or a sole
proprietorship. The term "partner" includes a member in such a
syndicate, group, pool, joint venture or other organization.

(8) "Person" includes any natural person, corporation, limited
liability company or partnership.

(9) "Qualified research and development credit property" means
depreciable property purchased for the conduct of qualified
research and development.

(10) "Research and development" means systematic scientific,
engineering or technological study and investigation in a field of
knowledge in the physical, computer or software sciences often
involving the formulation of hypotheses and experimentation for the
purpose of revealing new facts, theories or principles or
increasing scientific knowledge which may reveal the basis for new
or enhanced products, equipment or manufacturing processes.

(A) Research and development includes, but is not limited to, design, refinement and testing of prototypes of new or improved
products or equipment or the design, refinement and testing of
manufacturing processes before commercial sales relating thereto
have begun. For purposes of this section, commercial sales
includes, but is not limited to, sales of prototypes or sales for
market testing.

(B) Research and development does not include:

(i) Market research;

(ii) Sales research;

(iii) Efficiency surveys;

(iv) Consumer surveys;

(v) Product market testing;

(vi) Product testing by product consumers or through consumer
surveys for evaluation of consumer product performance or consumer
product usability;

(vii) The ordinary testing or inspection of materials or
products for quality control;

(viii) Management studies;

(ix) Advertising;

(x) Promotions;

(xi) The acquisition of another's patent, model, production or
process or investigation or evaluation of the value or investment
potential related thereto;

(xii) Research in connection with literary, historical or
similar activities;

(xiii) Research in the social sciences, economics, humanities
or psychology and other nontechnical activities; and

(xiv) The providing of sales services or any other service,
whether technical service or nontechnical service.

(B) An individual, corporation, limited liability company,
partnership, association or trust that is in control of the
taxpayer;

(C) A corporation, limited liability company, partnership,
association or trust controlled by an individual, corporation,
partnership, association or trust that is in control of the
taxpayer; or

(D) A member of the same controlled group as the taxpayer.

For purposes of this article, "control", with respect to a
corporation, means ownership, directly or indirectly, of stock
possessing fifty percent or more of the total combined voting power
of all classes of the stock of the corporation entitled to vote.
"Control", with respect to a trust, means ownership, directly or
indirectly, of fifty percent or more of the beneficial interest in
the principal or income of the trust. The ownership of stock in a
corporation, of a capital or profits interest in a partnership or
association or of a beneficial interest in a trust is determined in
accordance with the rules for constructive ownership of stock provided in section 267(c) of the United States Internal Revenue
Code of 1986, as amended, other than paragraph (3) of that section.
(12) "Taxpayer" means any person subject to the tax imposed by
article twenty-three or twenty-four of this chapter or both. In
the case of a sole proprietorship subject to neither the tax
imposed by article twenty-three nor the tax imposed by article
twenty-four, the term "taxpayer" means any sole proprietor who is
subject to the tax imposed by article twenty-one of this chapter.
(13) "This code" means the Code of West Virginia, 1931, as
amended.

(14) "This state" means the State of West Virginia.

WVC 11 - 13 R- 4
§11-13R-4. Annual combined qualified research and development
expenditure, qualified research and development
expenses.
(a) General. -- The annual combined qualified research and
development expenditure is the sum of the applicable percentage of
the cost of depreciable property purchased for the conduct of a
qualified research and development activity, which is placed in
service or use in this state during the taxable year, plus the
amount of qualified research and development expenses (as defined
in this section) deducted by the eligible taxpayer, for federal
income tax purposes for the taxable year.

(b) Applicable percentage of the cost of depreciable property.
-- For the purpose of subsection (a), the applicable percentage of
the cost of depreciable property is determined under the following
table:

If useful life is: The applicable percentage is:

Less than 4 years ....................................33 1/3

4 years or more but less than 6 years ................66 2/3

6 years or more .........................................100

The useful life of any property for purposes of this section
is determined by those methods as the tax commissioner may require
as of the date the property is first placed in service or use in
this state by the taxpayer.

(c) Placed in service or use. -- For purposes of the credit
allowed by this article, property is considered placed in service or use in the earlier of the following taxable years:

(1) The taxable year in which, under the taxpayer's
depreciation practice, the period for depreciation with respect to
the property begins; or

(2) The taxable year in which the property is placed in a
condition or state of readiness and availability for a specifically
assigned function.

(d) Cost of property. -- For purposes of subsection (a) of
this section, the cost of each property purchased for the conduct
of a qualified research and development activity is determined
under the following rules:

(1) Trade-ins. -- Cost does not include the value of property
given in trade or exchange for the property purchased for conduct
of the research and development activity.

(2) Damaged, destroyed or stolen property. -- If property is
damaged or destroyed by fire, flood, storm or other casualty, or is
stolen, then the cost of replacement property does not include any
insurance proceeds received in compensation for the loss.

(3) Rental property. -- The cost of property acquired by lease
for a term of ten years or longer shall be one hundred percent of
the rent reserved for the primary term of the lease, not to exceed
twenty years.

(4) Property purchased for multiple use. -- The cost of
property purchased for multiple business use, including direct use
in the conduct of a qualified research and development activity, together with some other business or activity not eligible under
this section, shall be apportioned between such activities. The
amount apportioned to the conduct of the qualified research and
development activity is considered to be eligible investment
subject to the conditions and limitations of this section.

(5) Self-constructed property. -- In the case of
self-constructed property, the cost thereof is the amount properly
charged to the capital account for depreciation in accordance with
federal income tax law.

(e) Qualified research and development expenses. -- For
purposes of this section:

(1) "Qualified research and development expenses" means the
sum of in-house and contract research and development expenses for
qualified research and development allocated to this state, which
are paid or incurred by the eligible taxpayer during the taxable
year. In no event does "qualified research and development
expenses" include:

(A) Any expense that must be capitalized and depreciated for
federal income tax purposes, or any expenditure paid or incurred
for the purpose of ascertaining the existence, location, extent or
quality of any deposit of coal, limestone or other natural
resource, including oil and natural gas; or

(B) Any wage or salary expense for wages or salary reported on
form W-2 for federal income tax purposes on which the personal
income tax is imposed under article twenty-one of this chapter, and against which tax the credit allowed under this article is applied.

(2) "In-house research and development expenses" means:

(A) Wages paid or incurred to an employee for qualified
services performed in this state by the employee;

(B) Amounts paid or incurred for supplies used in the conduct
of qualified research and development in this state; or

(C) Amounts paid or incurred to another person for the right
to use personal property in the conduct of qualified research and
development in this state.

(3) "Qualified services" means services consisting of:

(A) Engaging in qualified research and development;

(B) Engaging in the direct supervision or direct support of
qualified research and development; or

(C) If substantially all of the services performed by an
individual for the taxpayer during the taxable year consist of
services meeting the requirements of paragraph (A) or (B) of this
subdivision, the term "qualified services" means all services
performed by the individual for the taxable year.

(4) "Supplies" means any tangible property other than:

(A) Land or improvements to land; or

(B) Property of a character subject to depreciation for
federal income tax purposes.

(5) "Wages" has the meaning given to that term by section
3401(a) of the Internal Revenue Code of 1986, as amended. In the
case of self-employed individuals and owner-employees (within the meaning of section 401(c)(1) of the Internal Revenue Code), the
term "wages" includes the earned income (as defined in section
401(c)(2) of the Internal Revenue Code) of the employee. The term
"wages" shall not include any amount taken into account in
determining the federal targeted jobs credit under section 51(a) of
the Internal Revenue Code.

(6) "Contract research and development expenses" means:

(A) In general, sixty-five percent of any amount paid or
incurred by the taxpayer to any person (other than an employee of
the taxpayer) for qualified research and development; and

(B) If any contract research and development expenses paid or
incurred during any taxable year are attributable to qualified
research and development to be conducted after the close of the
taxable year, that amount is treated as paid or incurred during the
taxable year during which the qualified research and development is
conducted.

(7) "Qualified research and development" means research and
development that occurs in West Virginia.

(8) Excluded property. -- Any property owned or leased by the
taxpayer, the cost of which was the basis of a credit against tax
taken under any other article of this chapter, does not qualify as
property purchased for the conduct of a qualified research and
development activity for purposes of this article.

(9) Excluded expense. -- Any expense paid or incurred by the
taxpayer, which was the basis of a credit against tax taken under any other article of this chapter, does not qualify as a qualified
research and development expense for purposes of this article.

(f) Research and development by colleges, universities and
certain research and development organizations. -- In general,
sixty-five percent of the amount paid or incurred by a taxpayer to
a research institution as defined in this section for research and
development to be performed by the research institution is treated
as contract research and development expenses. The preceding
sentence applies only if the amount is paid or incurred pursuant to
a written research and development agreement between the taxpayer
and the research institution.

For purposes of this section, the term "research institution"
means any nonprofit educational organization which is an
institution of higher education (as defined in section 3304(f) of
the Internal Revenue Code of 1986, as amended), a West Virginia
institution of higher education subject to the jurisdiction of a
board described in article two-a, chapter eighteen-b of this code,
or any other nonprofit organization exempt from federal income
taxes which is organized and operated primarily to conduct
scientific research and is not a private foundation for federal
income tax purposes.

(g) Standards for determining qualified research and
development expenses. -- In prescribing standards for determining
which research and development expenses are considered to be
qualified research and development expenses for purposes of this section, the tax commissioner may consider: (1) The place where
the services are performed; (2) the residence or business location
of the person or persons performing the services; (3) the place
where research and development supplies are consumed; and (4) other
factors that the tax commissioner believes relevant in determining
whether or not the research and development expenses were made for
qualified research and development, and depreciable property was
purchased and used for qualified research and development, during
the taxable year.

(h) Depreciable property. -- Purchases of depreciable property
for the conduct of qualified research qualify as part of the annual
combined qualified research and development expenditure for
purposes of this article only if:

(1) The property is not acquired from a person whose
relationship to the person acquiring it would result in the
disallowance of deductions under section 267 or 707(b) of the
United States Internal Revenue Code of 1986, as amended;

(2) The property is not acquired from a related person or by
one component member of a controlled group from another component
member of the same controlled group. The tax commissioner may
waive this requirement if the property was acquired from a related
party for its then fair market value; and

(3) The basis of the property for federal income tax purposes,
in the hands of the person acquiring it, is not determined:

(A) In whole or in part by reference to the federal adjusted basis of such property in the hands of the person from whom it was
acquired; or

(B) Under section 1014(e) of the United States Internal
Revenue Code of 1986, as amended.

(1) Three percent of the annual combined qualified research
and development expenditure; or

(2) Ten percent of the excess of the annual combined qualified
research and development expenditure over the base amount.

WVC 11 - 13 R- 6
§11-13R-6. Application of credit.
(a) Credit allowed. -- Beginning in the year that the annual
combined qualified research and development expenditure is paid or
incurred, eligible taxpayers and owners of eligible taxpayers
described in subsections (d) and (f) of this section are allowed a
credit against the taxes imposed by articles twenty-three,
twenty-four and twenty-one of this chapter, in that order, as
specified in this section.

(b) Business franchise tax. -- The credit is first applied to
reduce the taxes imposed by article twenty-three of this chapter
for the taxable year, determined after application of the credits
against tax provided in section seventeen of said article, but
before application of any other allowable credits against tax.

(c) Corporation net income taxes. -- After application of
subsection (b) of this section, any unused credit is next applied
to reduce the taxes imposed by article twenty-four of this chapter
for the taxable year, determined before application of allowable
credits against tax.

(d) If the eligible taxpayer is a limited liability company,
small business corporation or a partnership, then any unused credit
after application of subsections (b) and (c) of this section is
allowed as a credit against the taxes imposed by article
twenty-four of this chapter on owners of the eligible taxpayer on
the conduit income directly derived from the eligible taxpayer by
its owners. Only those portions of the tax imposed by article twenty-four of this chapter that are imposed on income directly
derived by the owner from the eligible taxpayer are subject to
offset by this credit.

(1) Small business corporations, limited liability companies,
partnerships and other unincorporated organizations shall allocate
the credit allowed by this article among their members in the same
manner as profits and losses are allocated for the taxable year.

(2) No credit is allowed under this article against any
withholding tax imposed by, or payable under, article twenty-one of
this chapter.

(e) Personal income tax taxes. -- After application of
subsections (b), (c) and (d) of this section, any unused credit is
next applied to reduce the taxes imposed by article twenty-one of
this chapter for the taxable year determined before application of
allowable credits against tax of the eligible taxpayer.

(f) If the eligible taxpayer is a limited liability company,
small business corporation or a partnership, then any unused credit
after application of subsections (b), (c), (d) and (e) of this
section is allowed as a credit against the taxes imposed by article
twenty-one of this chapter on owners of the eligible taxpayer on
the conduit income directly derived from the eligible taxpayer by
its owners. Only those portions of the tax imposed by article
twenty-one of this chapter that are imposed on income directly
derived by the owner from the eligible taxpayer are subject to
offset by this credit.

(1) Small business corporations, limited liability companies,
partnerships and other unincorporated organizations shall allocate
the credit allowed by this article among their members in the same
manner as profits and losses are allocated for the taxable year.

(2) No credit is allowed under this article against any
withholding tax imposed by, or payable under, article twenty-one of
this chapter.

(g) The total amount of tax credit that may be used in any
taxable year by any eligible taxpayer in combination with the
owners of the eligible taxpayer under subsections (d) and (f) of
this section, and including any refundable credit claimed under
subsection (i) of this section, may not exceed two million dollars.

(h) Unused credit carry forward. -- Except to the extent
excess credit is refunded as provided in subsection (i) of this
section, if the credit allowed under this article in any taxable
year exceeds the sum of the taxes enumerated in subsections (b),
(c), (d), (e) and (f) of this section for that taxable year, the
eligible taxpayer and owners of eligible taxpayers described in
subsections (d) and (f) of this section may apply the excess as a
credit against those taxes, in the order and manner stated in this
section, for succeeding taxable years until the earlier of the
following:

(1) The full amount of the excess credit is used; or

(2) The expiration of the tenth taxable year after the taxable
year in which the annual combined qualified research and development expenditure was paid or incurred. Credit remaining
thereafter is forfeited.

(i) Refundable credit for "small qualified research and
development company". -- If the eligible taxpayer, including the
controlled group, if a member of a controlled group, has gross
revenues of not more than twenty million dollars and a payroll of
not more than two million five hundred thousand dollars, and the
credit allowed under this article in any taxable year exceeds the
sum of taxes enumerated in subsections (b), (c), (d), (e) and (f)
of this section for that taxable year, the eligible taxpayer and
owners of the eligible taxpayers described in subsections (d) and
(f) of this section may claim for that year the excess amount as a
refundable credit, not to exceed one hundred thousand dollars per
taxpayer, including owners and the controlled group, if applicable:
Provided, That not more than one million dollars of the unused
credits described in this subsection may be approved for refundable
credit by the tax commissioner during any fiscal year. Priority
for approval of refundable credit is determined based on the filing
date of the claim for refund with earlier claims having priority
over later claims.

(j) Application for certification. -- No credit is allowed or
may be applied under this article until the person seeking to claim
the credit has filed a written application for certification of the
proposed research and development program or project with the tax
commissioner and has received certification of the research and development program or project from the tax commissioner pursuant
to that written application. The certification of the program or
project must be received by the eligible taxpayer from the tax
commissioner prior to any credit being claimed or allowed for any
annual combined qualified research and development expenditure for
any research activity or project. This application shall be filed,
in the form prescribed by the tax commissioner, no later than the
last day for filing the tax returns, determined by including any
authorized extension of time for filing the return, required under
article twenty-one or twenty-four of this chapter for the taxable
year in which the property to which the credit relates is placed in
service or use, or the qualified research and development expenses
to which the credit relates are incurred by the taxpayer, and all
information required by the form shall be provided by the taxpayer.

(1) In the case of owners of eligible taxpayers described in
subsection (d) or (f) of this section, the application for
certification filed under this section by the limited liability
company, small business corporation or partnership owned by the
person is considered to be filed on behalf of the owner and no
separate filing of the application is required of the owner.

(2) Form of application. -- The application for certification
must be filed in the form as the tax commissioner prescribes and
shall contain the information as the tax commissioner requires to
determine whether the project should be certified as eligible for
credit under this article.

(3) Time period covered by certification. -- The application
may request certification of the research and development program
for one taxable year or multiple taxable years, as applicable,
based on the nature and character of the program or project plan
for the particular research and development project or activity.

(4) Requirements for application. -- The application shall
specifically set forth a written research and development program
plan generally describing the nature of the research and
development to be undertaken, the number and types of jobs, if any,
created by the applicant as a direct result of the research and
development program and the average wages and benefits paid to
those employees, the projected time period over which the research
and development shall be carried out, the period of time for which
the applicant seeks certification of the program or project and
other information as the tax commissioner requires.

(5) Certification. -- The tax commissioner may issue
certification of a research and development program or project if
it appears to the tax commissioner that the applicant intends to
engage in a bona fide research and development activity, as
described in this article, and will otherwise comply with the
requirements of this article and all rules and requirements
applicable thereto.

(6) Time period covered by certification. -- The tax
commissioner may issue certification for the period of time for
which the eligible taxpayer seeks certification or a different period of time, within the discretion of the tax commissioner. In
his or her discretion, the tax commissioner may require that a
separate application be filed for each tax year in which qualified
research and development activity is to be undertaken or in which
qualified research and development property is to be placed in
service or use.

(7) Failure to file. -- The failure to timely file the
application for certification of a research and development program
or project under this section results in forfeiture of one hundred
percent of the annual credit otherwise allowable under this
article. This penalty applies annually until the application is
filed.

(8) Research and development undertaken without certification.
-- If a person has filed an application for certification of a
research and development program or project and has failed to
receive certification of the plan or program from the tax
commissioner, no credit is allowed under this article for the
research and development activity or investment relating thereto.

(9) Failure to comply with terms of certification. -- If a
person has filed an application for certification of a research and
development program or project and has received certification of
the plan or program from the tax commissioner, but fails to conform
to the terms of the certification, no credit is allowed under this
article for the research and development activity or for investment
in the research and development activity by the eligible taxpayer. This restriction may be waived by the tax commissioner upon a
finding that the research and development undertaken was within the
requirements of this article and that there was no intent to
defraud the state or willful neglect in the applicant's failure to
conform to the terms of the certification.

(10) Failure to comply with certification time restrictions.
-- If a person has filed an application for certification of a
research and development program or project and has received
certification of the plan or program from the tax commissioner, but
fails to conform to the time periods specified therein for the
certified research and development program or project, or fails to
renew the certification so as to cover ongoing or subsequent
research and development activity, the research and development
activity is out of compliance with the terms of the certification
and no credit is allowed under this article for, or relating to,
the research and development activity by any person or taxpayer.
This restriction may be waived by the tax commissioner upon a
finding that the research and development thus undertaken was
within the requirements of this article and that there was no
intent to defraud the state or willful neglect in the applicant's
failure to conform to the terms of the certification.

WVC 11 - 13 R- 7
§11-13R-7. Forfeiture of unused tax credits; redetermination of
credit allowed.
(a) Disposition of property or cessation of use. -- If during
any taxable year, property with respect to which a tax credit has
been allowed under this article:

(1) Is disposed of prior to the end of its useful life, as
determined under section four of this article; or

(2) Ceases to be used in a qualified research and development
activity of the taxpayer in this state prior to the end of its
useful life, as determined under section four of this article, then
the unused portion of the credit allowed for such property is
forfeited for the taxable year and all ensuing years. Except when
the property is damaged or destroyed by fire, flood, storm or other
casualty, or is stolen, the taxpayer shall redetermine the amount
of credit allowed in all earlier years by reducing the applicable
percentage of cost of such property allowed under section four of
this article, to correspond with the percentage of cost allowable
for the period of time that the property was actually used in the
qualified research and development activity of the taxpayer. The
taxpayer shall then file a reconciliation statement with its annual
return filed under article twenty-three of this chapter, for the
year in which the forfeiture occurs and pay any additional taxes
owed due to reduction of the amount of credit allowable for such
earlier years, plus interest and any applicable penalties.

WVC 11 - 13 R- 8
§11-13R-8. Transfer of qualified research and development
investment to successors.
(a) Mere change in form of business. -- Property may not be
treated as disposed of under section seven of this article, by
reason of a mere change in the form of conducting the business as
long as the property is retained in a business in this state for
use in qualified research and development, and the taxpayer retains
a controlling interest in the successor business. In this event,
the successor business is allowed to claim the amount of credit
still available with respect to the property transferred, and the
taxpayer (transferor) may not be required to redetermine the amount
of credit allowed in earlier years.

(b) Transfer or sale to successor. -- Property may not be
treated as disposed of under section seven of this article by
reason of any transfer or sale to a successor business which
continues to use the property in qualified research and
development. Upon transfer or sale, the successor shall acquire
the amount of credit that remains available under this article for
each subsequent taxable year, and the taxpayer (transferor) may not
be required to redetermine the amount of credit allowed in earlier
years.

WVC 11 - 13 R- 9
§11-13R-9. Identification of investment credit property.
(a) Every taxpayer who claims credit under this article shall
maintain sufficient records to establish the following facts for
each item of qualified research and development property:

(1) Its identity;

(2) Its actual or reasonably determined cost;

(3) Its straight-line depreciation life;

(4) The month and taxable year in which it was placed in
service;

(5) The amount of credit taken; and

(6) The date it was disposed of or otherwise ceased to be
qualified research and development property.

(b) Every taxpayer who claims credit under this article shall
also maintain sufficient records to establish the number and types
of new jobs, if any, created, the wages and benefits paid to
employees filling the new jobs and the duration of each job.

WVC 11 - 13 R- 10
§11-13R-10. Failure to keep records of qualified research and
development credit property.
A taxpayer who does not keep the records required for
identification of qualified research and development credit
property, is subject to the following rules:

(1) A taxpayer is treated as having disposed of, during the
taxable year, any qualified research and development credit
property which the taxpayer cannot establish was still on hand and
used in qualified research and development activity at the end of
that year.

(2) If a taxpayer cannot establish when qualified research and
development credit property reported for purposes of claiming this
credit returned during the taxable year was placed in service, the
taxpayer is treated as having placed it in service in the most
recent prior year in which similar property was placed in service,
unless the taxpayer can establish that the property placed in
service in the most recent year is still on hand and used in
qualified research and development activity at the end of that
year. In that event, the taxpayer will be treated as having placed
the returned property in service in the next most recent year.

WVC 11 - 13 R- 11
§11-13R-11. Tax credit review and accountability.
(a) Beginning on the first day of February, two thousand six,
and on the first day of February every third year thereafter, the
commissioner shall submit to the governor, the president of the
Senate and the speaker of the House of Delegates a tax credit
review and accountability report evaluating the cost effectiveness
of the credit allowed under this article during the most recent
three-year period for which information is available. The criteria
to be evaluated includes, but is not limited to, for each year of
the three-year period:

(1) The numbers of taxpayers claiming the credit;

(2) The net number, type and duration of new jobs created by
all taxpayers claiming the credit and wages and benefits paid;

(3) The cost of the credit;

(4) The cost of the credit per new job created;

(5) Comparison of employment trends for the industry and for
taxpayers within the industry that claim the credit; and

(6) The amount of excess credit refunded to small qualified
research and development companies pursuant to subsection (i),
section six of this article.

(b) Taxpayers claiming the credit shall provide information as
the tax commissioner requires to prepare the report: Provided,
That the information shall be subject to the confidentiality and
disclosure provisions of sections five-d and five-s, article ten of
this chapter.

WVC 11 - 13 R- 12
§11-13R-12. Effective date.
The provisions of this article become effective on the first
day of January, two thousand three, and apply only to qualified
investment made on or after that date, except that the amendments
to this article enacted in two thousand four shall become effective
for taxable years beginning on or after the first day of July, two
thousand four, and apply only to unused credit attributable to
qualified investment made on or after that date and prior to the
first day of January, two thousand eight.

WVC 11 - 13 R- 13
§11-13R-13. Expiration of tax credit.

The Strategic Research and Development Tax Credit Act
terminates on January 1, 2014, and no credit is available to any
taxpayer for any qualified investment or expenditure made on or
after that date. Taxpayers which have gained entitlement to the
credit pursuant to qualified investment or expenditure prior to
January 1, 2014, retain that entitlement and may apply the credit
pursuant to the requirements and limitations of this article.
Note: WV Code updated with legislation passed through the 2016 Regular Session
The West Virginia Code Online is an unofficial copy of the annotated WV Code, provided as a convenience. It has NOT been edited for publication, and is not in any way official or authoritative.